Net Income Per Common Share

6 Months Ended

Jun. 30, 2020

Note 10 – Net Income Per Common Share

The Company determines basic earnings per share by dividing net income less preferred stock dividends by the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined by dividing net income less dividends on convertible preferred stock plus interest on convertible subordinated debt by the weighted average number of shares outstanding increased by both the number of shares that would be issued assuming the exercise of stock options or restricted stock unit awards under the Company’s 2003 and 2013 Stock Incentive Plans and the conversion of preferred stock and subordinated debt if dilutive.


	Six Months Ended June 30						Three Months Ended June 30
(Dollars in thousands except shares and per share data)	2020		2019		2020		2019
Numerator for basic earnings per share:
Net income from continuing operations	$	19,082	$	18,123	$	18,034	$	14,931
Less: Dividends on preferred stock	229		243		115		122
Net income from continuing operations available to common shareholders - basic	18,853		17,880		17,919		14,809
Net income from discontinued operations available to common shareholders - basic and diluted	—		446		—		446
Net income available to common shareholders - basic	$	18,853	$	18,326	$	17,919	$	15,255

Numerator for diluted earnings per share:
Net income from continuing operations available to common shareholders - basic	$	18,853	$	17,880	$	17,919	$	14,809
Add: Dividends on convertible preferred stock	—		243		—		122
Add: Interest on subordinated debt (tax effected)	—		346		—		174
Net income from continuing operations available to common shareholders - diluted	$	18,853	$	18,469	$	17,919	$	15,105

Denominator:
Total average shares outstanding	11,948,790		11,625,903		11,954,813		11,644,061
Effect of dilutive convertible preferred stock	—		489,625		—		489,625
Effect of dilutive convertible subordinated debt	—		775,000		—		775,000
Effect of dilutive stock options and restricted stock units	207,424		249,084		57,032		246,616
Total diluted average shares outstanding	12,156,214		13,139,612		12,011,845		13,155,302

Earnings per share from continuing operations - basic	$	1.58	$	1.54	$	1.50	$	1.27
Earnings per share from discontinued operations - basic	$	—	$	0.04	$	—	$	0.04
Earnings per share - basic	$	1.58	$	1.58	$	1.50	$	1.31
Earnings per share from continuing operations - diluted	$	1.55	$	1.41	$	1.49	$	1.15
Earnings per share from discontinued operations - diluted	$	—	$	0.03	$	—	$	0.03
Earnings per share - diluted	$	1.55	$	1.44	$	1.49	$	1.18

For the three and six months ended June 30, 2020 and 2019, approximately 859 thousand and 386 thousand, respectively, options to purchase shares of common stock were not included in the computation of diluted earnings per share because the effect would be antidilutive.

For the three months ended June 30, 2020 and 2019, approximately 218 thousand and 142 thousand shares, respectively, of restricted stock units were not included in the computation of diluted earnings per share because the effect would be antidilutive.

For the six months ended June 30, 2020 and 2019, approximately 192 thousand and 142 thousand shares, respectively, of restricted stock units were not included in the computation of diluted earnings per share because the effect would be antidilutive.